All Things Policy The China–EU Battle Over Electric Vehicles
Feb 6, 2026
Bhumika Sevkani, a research analyst on China’s new energy sector at the Takshashila Institution. She discusses why EU tariffs on Chinese electric vehicles had limited effect. She explains how Chinese firms shifted to hybrids and local assembly. She outlines minimum import prices as an alternate tool and the broader trade and industrial policy tensions between China and Europe.
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Tariffs Didn’t Stop Chinese Market Share
- Tariffs failed to stop Chinese EVs gaining share because manufacturers shifted products and supply chains.
- Chinese firms pivoted to hybrids and local European assembly to bypass tariff effects.
BYD’s Hungary Plant Highlights Assembly Question
- BYD is building a facility in Hungary with trials expected in early 2026.
- It's unclear if such plants will bring substantial local value addition beyond assembly.
Minimum Import Prices Are Complex To Administer
- Minimum import prices (MIPs) require exporters to submit model-specific price undertakings for EU approval.
- The mechanism is administratively complex and risks cross-compensation loopholes and opacity.